14 june 2011 global economic recovery: from a surging start to a softer patch? rob dobson
TRANSCRIPT
14 June 2011
Global economic recovery:
From a surging start to a softer patch?
Rob Dobson
2
Agenda: Sovereign Wealth Forum
Introduction to the PMIs
Global economic recovery: Softening in Q2
Deja vu and current levels of recuperation
3
Introduction to PMIs
Business surveys of over 18,000 companies worldwide each month
Provide timely and accurate economic indicators
Fill gaps in official data– Official data are often only available weeks, months or years after the PMIs– Official data are subject to significant revision
PMIs can be broken down to provide an accurate representation of global and national trends
4
Sharp global growth slowdown signalled in Q2
Global GDP and the PMI Manufacturing and services
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
2007 2008 2009 2010 2011
Global Manufacturing Output
Global Services Business Activity
PMI
Sources: Markit, ISM, JPMorgan, Ecowin.
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
2000 2002 2004 2006 2008 2010
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Global PMI Composite Output
Global GDP
PMI GDP annual % change
5
Developed market growth slips closer to stagnation
Developed Markets Emerging Markets
34.0
38.0
42.0
46.0
50.0
54.0
58.0
62.0
2000 2002 2004 2006 2008 2010
-6%
-4%
-2%
0%
2%
4%
Developed Market PMI Output
Developed Market GDP
PMI GDP annual % change
40.0
45.0
50.0
55.0
60.0
2000 2002 2004 2006 2008 2010
0%
2%
4%
6%
8%
10%
Emerging Market PMI Output
Emerging Market GDP
PMI GDP annual % change
Sources: Markit, ISM, JPMorgan, HSBC, Ecowin.
6
Developed markets slowing – EZ recovery remains uneven
Sources: Markit, ISM.
G4 Developed Markets EZ recovery remains ‘lop-sided’
30.0
40.0
50.0
60.0
70.0
2007 2008 2009 2010 2011
United StatesEurozoneJapanUnited Kingdom
PMI Output Index (Manufacturing & Services)
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
2007 2008 2009 2010 2011
GermanyFranceItalySpainIrelandGreece (manu. only)
PMI Output Index (Manufacturing & Services)
7
UK and US PMIs retreat from ‘rate-hike’ territory
Sources: Markit, ISM, Bank of England, European Central Bank, US Federal Reserve Bank.
30
40
50
60
70
'98 '01 '04 '07 '10
-150
-125
-100
-75
-50
-25
0
25
50
75
Fed Target Rate
US PMI
Rate change (%)PMI, all sector
35
40
45
50
55
60
'98 '01 '04 '07 '10
-150
-125
-100
-75
-50
-25
0
25
50
BoE base rate
UK PMI
Rate change (%)PMI, all sector
35
40
45
50
55
60
65
'98 '01 '04 '07 '10
-125
-100
-75
-50
-25
0
25
50
75
ECB base rate
Eurozone PMI
Rate change (%)PMI, all sector
UK Eurozone US
8
China cools as government acts to rein in growth
Sources: Markit, HSBC, SABB HSBC.
BRIC Emerging Europe & Middle East
30.0
40.0
50.0
60.0
70.0
2007 2008 2009 2010 2011
Brazil
Russia
India
China
PMI Output Index (Manufacturing & Services)
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2007 2008 2009 2010 2011
Poland Manufacturing
Czech Manufacturing
Turkey Manufacturing
Saudi Arabia + UAE (whole economy)
PMI Output Index
9
Fears of jobless economic recovery rise
Sources: Markit,JPMorgan, ISM, Bureau of Labor Statistics.
Global PMI – orders and jobs US employment
28
31
34
37
40
43
46
49
52
55
58
61
2002 2004 2006 2008 2010
-900
-700
-500
-300
-100
100
300
500
ISM CompositeEmployment Index
Non-farm payrollchange ('000)
ISM Employment Index Non-farm payroll change, '000
30
35
40
45
50
55
60
65
'99 '01 '03 '05 '07 '09 '11
34
37
40
43
46
49
52
55
58
New business
Employment
PMI New Orders Index PMI Employment Index
10
Price pressures and supply chain disruptions ease
Data updated at close 3 June 2011. Sources: Ecowin, Markit, JPMorgan. *inverted
Global PMI – prices Commodity markets
30
60
90
120
150
2008 2009 2010 2011
1000
3000
5000
7000
9000
11000
WTI
Copper
Oil (US$/barrel) Copper ($/tonne)
25
45
65
85
1998 2000 2002 2004 2006 2008 2010
37
41
45
49
53
57
Global Manufacturing PMI Prices
Global Manufacturing PMI delivery times
PMI Delivery Times Index*PMI Input Prices Index
-11.6%
-11.2%
11
Looking familiar?
Sources: Markit, JPMorgan.
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
2004 2005 2006 2007 2008 2009 2010 2011
Global Manufacturing Output
Global Services Business Activity
PMI
Recovery begins
QE2 announced
12
Recuperated or still in recovery
Source: Ecowin.
13
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